Is This Treasury Department Blog Post Super-Bullish For Tech Investors?

It's not often that a post on a government blog could be
considered "actionable" for investors, but this is interesting...

The Treasury Department has put up a
post about the politics and cost of a repatriation tax
holiday -- letting companies move a bunch of cash from overseas
accounts back to the US without paying a ton of taxes on it.

The general tone is negative, that such a tax holiday would be
costly, and with little benefit, but Citi's Steve Englander
detects some important wiggle room.

We sent this trade recommendation out, recognizing that we might
be early to this trade, but also feeling that some political
momentum was beginning to emerge that favored HIA, either as the
Administration prefers, as part of comprehensive corporate tax
reform, or as US House of Representatives’ Republican Majority
Leader Cantor suggested recently, as an interim measure while
broader tax reform was debated. Today's comments on a Treasury
blog by Treasury Assistant Secretary Mundaca were viewed by many
as a hardening of the Administration line but his conclusion
reiterates the Administration's willingness to deal: "The tax treatment of overseas earnings
could be considered as a part of broader corporate tax reform,
but as Secretary Geithner has said, it would not be sensible to
consider a repatriation holiday outside of that
context." As a footnote, the Bush Treasury was no more enthusiastic
about HIA-1 in 2004 than the Obama Treasury is about HIA-2
now, and on largely the same grounds. However, it
was very attractive to the broad business community, caused
direct pain to no one and had considerable Congressional support.

If this does happen, the potential impact for investors could be
significant. The tech industry has a ton of cash parked overseas
that it's just sitting on for lack of good investment
opportunities (think: aging giants like Microsoft, Cisco, and
Intel). Folks have been clamoring for them to pay more in
dividends, noting their huge cash piles, but the tax repatriation
issue is an impediment.

Take away this barrier, and suddenly a world of dividends,
buybacks, and acquisitions opens up.